Guide to Life Insurance for Couples in Canada

Having a life insurance policy is one of the most important things you can do for your family. But with so many demands on your time and energy, learning about life insurance for couples ends up being put off as a “to-do, but later” item.  

Rachelle, Senior Copywriter at PolicyMe, knew she had to figure it out. “Life insurance has been on our minds since buying a house and having a kid, but it never was a priority. As our daughter grows from a baby to a kid, we feel like we can finally start 'living' again, which made the need for life insurance seem more real.” 

Life insurance gives you peace of mind, knowing your partner and kids are protected no matter what. We’ll give you a rundown on:

  • Why you need life insurance
  • Types of insurance available for couples (and no, you don’t have to be married!)
  • The costs involved with life insurance policies

Why do couples need life insurance?

Everyone has hopes and dreams for their family, and no one plans to pass away. Life insurance is a way to help you look after your family, even after you’re gone, with a financial safety net.

The Government of Canada describes a life insurance payout as a “tax-free, lump-sum amount“ to your loved ones to help manage expenses after your passing.

For example, if you passed earlier than expected, ask yourself if your partner would be able to:

  • Cover funeral expenses
  • Pay the mortgage
  • Support the kids and themselves
  • And cover existing debts all on their own?

And in the unfortunate event that both you and your partner pass away, life insurance ensures your kids will be taken care of. This way, they can have the same quality of life as they do now. 

Image with text that reads: "Life Insurance acts as a financial safety net for your beneficiaries (your partner and/or kids) if you pass away." for article about Life Insurance for Couples in Canada

What are the types of life insurance for couples?

The options for life insurance for partners comes in two main types: single life insurance or joint life insurance

Both have their pros and cons, so take some time to consider which one is best for your family’s specific priorities and needs. Let’s break down these two options.

Life insurance for individuals

Going for life insurance separately has one significant benefit: flexibility. Individual life insurance policies allow you and your partner to choose different coverage amounts and policy terms.

And if you choose to divorce or separate, you won’t have to deal with dividing your coverage into separate policies.

Of course, this flexibility generally comes at a higher price. For example, it tends to be more expensive to buy two different policies than a joint policy covering two people. 

Joint life insurance for partners

If you’ve wondered what type of policy covers two people and pays upon the death of one, it’s the joint insurance policy. 

This type of coverage typically has a first-to-die policy, so while the surviving partner will receive the death benefit if they’re listed as a beneficiary, they will no longer be covered after their partner’s passing. And buying a new policy when you’re older can cost more.

The same applies if you decide to split up, particularly if it’s later in life. In general, the older you are, the more likely you are to have health issues that may impact your lifespan. This increased risk results in higher premiums. 

If you hold a joint life insurance policy and choose to divorce before the term is up, you have options, such as:

  • Naming each spouse as the beneficiaries in trust, to manage the funds on behalf of the children if the other passes away
  • Keeping the policy as-is
  • Transferring the policy to one spouse
  • Or canceling the policy outright

Finding the best life insurance options for couples

In a recent survey, we found that while 77% of Canadian parents have life insurance, many either have 

  • Inadequate coverage (i.e. a group insurance plan through their employer)
  • Or unnnecessary coverage (i.e. permanent life insurance or life insurance policies on their child)

There’s a few factors you’ll want to think about when searching for the best life insurance for couples. Here are some of the big ones. 

1. Expenses: How much does a joint policy cost?  Some companies will give you a discount when you and your partner both apply for coverage.

2. Approval time: How long does it take to get approved? Sometimes, insurers can take months to process applications.

3. Application process: Can you complete the process online, or do you have to see somebody in person? An electronic application and document delivery option is fast and convenient for busy families.

Time is a precious resource for parents; never ending to-do lists, middle-of-the-night wake ups and ’round-the-clock care are an everyday reality.

PolicyMe offers hassle-free and affordable joint life insurance for couples, with an online application and approval process. You can customize each respective policy to match the coverage amount and term length that each partner desires, saving 5%.

The process takes less than 20 minutes each, which is actually less time than figuring out what movie to watch. (It’s true, we’ve timed it.)

How much life insurance coverage do most couples need in Canada?

How do you find the sweet spot between purchasing too much coverage and not buying enough? Take 2 minutes to watch the video!

These questions will help you start thinking about the right coverage amount for your family. 

When is the best time for couples to get life insurance?

Are you in a relationship with shared financial obligations and dependents in your care? If so, it’s time to start thinking about life insurance. The sooner, the better. 

It might sound obvious, but the risk of passing away is low if you’re healthy. So life insurance might seem like an unnecessary expense, but no one plans to pass away young. 

The purpose of life insurance is to help safeguard your family from the financial impact of an unexpected death. 

At PolicyMe, we want to provide information to you upfront to help you make the right decision when choosing lfe insurance. No high-pressure sales tactics or complicated jargon. 

Use our online tool below to check out what rate you qualify for in 20 minutes or less. Once approved, you activate each respective policy saving 5%, then get back to the fun stuff, like holding hands in your popcorn bowl.

Real-life example: Rachelle and Ben's experience with life insurance

Remember our colleague Rachelle? She has been married to her husband Ben for four years; they have a three-year-old daughter together and pay a mortgage on their home. 

Image of couple wearing sunglasses with text that reads "Meet Ben & Rachelle!"

After getting Ben on board, they applied for life insurance with PolicyMe. They weren’t sure how much coverage they’d need, but then he asked a question that clarified things for both of them.

Ben asked, “What would make life a bit easier if you and our daughter were left in a tricky financial situation?”

They decided it’d be ideal to have enough to:

  • Pay off their home ($500,000)
  • Cover their daughter’s post-secondary education ($80,000)
  • Pay off their debts ($10,000)

They also opted to include coverage equal to a year of salary. This brought them to a life insurance policy of $700,000. 

Using PolicyMe’s online life insurance calculator, they were approved in minutes and had their policies set up within a week. 

“The weight of the financial “what if” was lifted, and trust me, it’s a beautiful feeling,” says Rachelle. 

“So here’s my advice: tonight, while your partner looks for something to watch on Netflix,  grab your phone and fill out an application. I promise, you’ll have it done before they find a show, and you can rest easy knowing that you’re both protected.”

The best life insurance option for couples in Canada

For many couples, particularly if they’re young and healthy, joint life policies offer enough coverage to insure against a worst-case scenario. 

Most insurance companies offer joint life insurance but may require in-office appointments for consultation, approval and paperwork. 

Life gets busy with work, errands and the kids constantly underfoot. So we’ve made it easy for parents to find affordable life insurance coverage even if a thousand other things are going on. 

Compare our rates for term life insurance against some of our competitors below.

Chart detailing life insurance companies by price, which places PolicyMe as the best option for term life insurance for couples

All prices in this article are based on a healthy individual purchasing a 20-year term life insurance plan with $500,000 in coverage, unless otherwise stated.

Read full reviews of the best life insurance providers in Canada.

In summary: life insurance for couples

Life insurance isn’t exactly a light and breezy topic. 

But you have bills to pay, mortgage payments to cover, and children to take care of, no matter what happens. Getting a quote and finding the right coverage for your family can be quick and easy.

Key takeaways

  • It’s essential to have a life insurance policy in place for you and your partner to protect your family financially in case the worst happens.
  • You and your spouse can choose to hold separate policies for maximum flexibility, but joint life insurance plans tend to be more affordable.
  • Life insurance is less pricey when you’re young, so it’s a good idea to apply sooner. 

FAQs: life insurance for couples

Laura McKay

COO & Co-Founder

About the Author

Laura brings 7 years of experience working in insurance & strategic operations as a management consultant at Oliver Wyman, after experiences at Manulife and Munich Re. In 2017, she launched a successful initiative for the World Economic Forum focused on innovation in insurance, working closely with insurers, tech pioneers, and policy-makers.

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